As phone companies enter the content-delivery business, they should take care not to recreate what already is offered by cable TV and satellite TV companies, said Robert Clasen, president and CEO of Starz Entertainment Group LLC. Instead they must create a new offer that is as different as broadcast TV was from radio. Only then can they generate the wow factor, he says.
Clasen spoke to attendees of TELECOM 05 in a keynote address yesterday, which was followed by a Q&A he directed with executives from the programming industry.
In issuing the challenge to telcos entering the entertainment business, Clasen cited similar evolutions from radio to broadcast, broadcast to cable and cable to satellite. None came into their own until they created their own content, he said, explaining that each initially copied its predecessor with lackluster results. Similarly, telcos, he said, must start by offering what cable already does but with new twists like different choices and pricing.
He urged telcos to explore selling single channels at a time, offering ethnic or inlanguage programming and exploiting their network capacity and ability to provide content on different devices and formats, such as televisions, laptops and wireless phones.
Clasen predicted some changes in the TV business would result from telco entry. Among them might be the marginalization of channels.
With Starz Ticket broadband TV service, for example, customers have the ability to choose from 300 movie titles at once, not just whats showing at 8 p.m.
Likewise, he said the half-hour and hour formats for TV shows could be made obsolete by the ability to download a two-minute clip or a 48-hour program. This is a breakthrough for the creative community, he added, noting the restrictions placed on content by the time limitations.
Finally, he said the introduction of portability via mobile devices will change how content is developed and presented. Content may be king, but convenience drives adoption, he said.
The content industry is eager to work with telcos to leapfrog the competitors, Clasen said. We can, working together, create the next-generation of communications, he said, noting programmers are looking to be telcos partners rather than suppliers.
During the Q&A, Clasen asked panelist cable TV veteran Curtis Symonds whether there was still a need for new content with all the available channels. There is a tremendous need, said Symonds, who is now COO for the WNBAs Washington Mystics and former executive vice president of sales and marketing for Black Entertainment Television. He said telcos should take note of the increasingly multicultural audience and provide niche programming.
Dan Cohen, senior vice president and general manager for Buena Vista Television, agreed, noting ethnic and in-language programming represents an opportunity.
Cohen, whose company is working with Verizon Communications Inc. for content for its FiOS TV offer, said he was pleased that the Bell company took a program-centric approach to its offer. While some of the offers will be linear channels much like the TV fare today, he said Verizon also is interested in the companys new programming for broadband delivery, for example.
Fox Cable Networks Lindsay Gardner allayed concerns about getting access to content from vertically integrated companies.
Fox, which owns part of DIRECTV, cannot afford to alienate consumers by playing favorites with the satellite TV distributor, said Gardner, who serves as Fox Cables executive vice president of affiliate sales and marketing. At our core, we are a content company, he said.
The content providers expressed enthusiasm over high-definition video delivery.
Movies look terrific in high definition, said Cohen, noting that while its not yet available in pay-per-view or VoD offers, its coming. Id like to see it in the next year, he said, noting that when high-definition DVDs proliferate, that will drive demand.
Clasen of Starz, which is one of the first to offer high-definition programming, says it has been difficult to get distribution deals because of the requisite bandwidth. We look to this audience to help HD be a leader, he said.
All panelists encouraged telcos to look to viewers for cues as to their programming moves over the next five years. You have to look at the ever-changing viewer, said Symonds. Dont think one [model] serves all.